Newsletter

Beware of Up-Front Fees in Foreclosure Rescue

If a foreclosure rescue scheme seems too good to be true, it could cost you a lot.

The legislature passed the Foreclosure Rescue Fraud Prevention Act in 2008. This act specifies that no fees are to be paid by the borrower until the rescue services are fully rendered, and that a written contract with terms and conditions has to be signed by both parties before services begin. Furthermore by 2010, anyone performing loan modification services had to have an active license from the Florida Office of Financial Regulation.

Besides up-front fees, other things to look out for when you are looking for hope include:

Instruction NOT to contact your lender, lawyer or credit or housing counselor

Payment only accepted in cashier’s check or wire transfer

Guarantee to stop foreclosure no matter what

Encouragement for you to lease your home so you can buy it back over time

Mortgage payments to be made directly to the company rather than your lender

Request for you to transfer your property title to the company

The Florida Bar cautions:

‘If any business or individual offers to help you stop foreclosure immediately by signing a document authorizing them to act on your behalf or to set up financing for you, do not sign without consulting a professional (an attorney or HUD-approved counselor). This may be a trick to get you to sign over title to your home. You are then vulnerable to losing your home and all of your equity in your home to the so called “rescuer.”’

Again, no one can guarantee results of a loan modification application, short sale negotiation, or foreclosure defense. If the offer seems too good to be true, check out the risk.